THE CAIRNS ECONOMY Realities, Successes, Failures, Lessons Where to from here? Ref: J2130 July 2008.

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THE CAIRNS THE CAIRNS ECONOMY ECONOMY Realities, Realities, Successes, Successes, Failures, Lessons Failures, Lessons Where to from here? Where to from here? Ref: J2130 Ref: J2130 July 2008 July 2008

Transcript of THE CAIRNS ECONOMY Realities, Successes, Failures, Lessons Where to from here? Ref: J2130 July 2008.

THE CAIRNS THE CAIRNS ECONOMYECONOMYRealities, Realities,

Successes, Successes, Failures, LessonsFailures, LessonsWhere to from here?Where to from here?

Ref: J2130Ref: J2130

July 2008July 2008

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A TIME OF CHANGEA TIME OF CHANGE

Climate change doubts Green house gas responses New oil shock Loss of air services to Japan New governments Council amalgamation New political parties Sale of airport Credit squeeze Inflationary pressures

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Industries earning outside Industries earning outside income based on natural income based on natural

resource advantagesresource advantages

SERVICE INDUSTRY STRUCTURESERVICE INDUSTRY STRUCTURE

MOST REGIONAL ECONOMIES

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Trade area expansion, Trade area expansion, especially higher order especially higher order services. services.

Specialist skills, “Clusters”.Specialist skills, “Clusters”.

SERVICE INDUSTRYOUTSIDE EARNINGS

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Trade area expansionTrade area expansion= blocked - south weak to = blocked - south weak to

north. north.

Special skill clustersSpecial skill clusters= weak – not enough.= weak – not enough.

Base industry Base industry expansion/diversificationexpansion/diversification

= pursued.= pursued.

1960’s / 1970’s

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CAIRNS’ FOREMOST CAIRNS’ FOREMOST ECONOMIC ROLEECONOMIC ROLE

(A transport, distribution, (A transport, distribution, manufacturing, retail, manufacturing, retail,

administrative, services hubadministrative, services hubfor Far North for Far North

Queensland)Queensland)

Servicing City/CapitalServicing City/Capital

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The Tropical North Queensland region serviced by the The Tropical North Queensland region serviced by the city of Cairns is 1½ times the size of Victoria. It is as city of Cairns is 1½ times the size of Victoria. It is as deep from north to south as the State of New South deep from north to south as the State of New South Wales, in area as large as the British Isles, and about Wales, in area as large as the British Isles, and about the size of California.the size of California.

CAPITAL OF A LARGE PREVIOUSLY CAPITAL OF A LARGE PREVIOUSLY UNDERDEVELOPED UNDERDEVELOPED

RESOURCE RICH FRONTIER REGIONRESOURCE RICH FRONTIER REGION

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TROPICALTROPICAL - -

Initial challenges to Initial challenges to technology technology

from north west Europe.from north west Europe.

Late settled.Late settled.

Initially slow to develop.Initially slow to develop.

Now catching up.Now catching up.

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Plant Growth Potential. Plant Growth Potential.

Marine Resources.Marine Resources.

Minerals.Minerals.

Natural Tourism Resources.Natural Tourism Resources.

NOT POOR IN NOT POOR IN UNDERLYING RESOURCESUNDERLYING RESOURCES

1010

THE REGION ACCOUNTS FOR THE REGION ACCOUNTS FOR 26%26% OF AUSTRALIA’S WATER RUNOFFOF AUSTRALIA’S WATER RUNOFF

1111

Plant Plant GrowthGrowth

Potential. Potential.

NOT POOR NOT POOR IN IN

UNDERLYING UNDERLYING RESOURCESRESOURCES

1212

Traditionally smaller but on Traditionally smaller but on the way up.the way up.

Mining company jobs risen Mining company jobs risen recently from about 800 to recently from about 800 to about 1,600.about 1,600.

Extra 1,600 on way over 5-Extra 1,600 on way over 5-year time frame.year time frame.

Air links to 17 mining Air links to 17 mining operations – 2,100 ‘fly-in’ operations – 2,100 ‘fly-in’ workers – more on the way.workers – more on the way.

MININGMINING

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Mining Related Air Services

Queensland Areas

1414

Mining Related & Other Relevant Air Services, Mining Related & Other Relevant Air Services,

Interstate & OverseasInterstate & Overseas

1515

NOT POOR IN MARINE NOT POOR IN MARINE RESOURCESRESOURCES

EMPLOYMENT IN MARINE INDUSTRIES BY STATISTICAL DIVISIONS, 2006.

730

2,550

1,090

0

1000

2000

3000

Cairns/Far North Tow nsville/North Mackay/Mackay

No.

CUMMINGS ECONOMICS.

Source: ABS Census data plus estimated defence element.

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TOURISM RESOURCESTOURISM RESOURCESTourism Growth PhasesTourism Growth Phases

CAIRNS AIRPORT PASSENGER MOVEMENTS(Excluding international transits)

No. %

1997/98 2,725,000 0.4%0.4% Asian crisis

1998/99 2,770,000 1.7%

1999/00 2,882,000 4.0% +6%

2000/01 2,972,000 3.1%

2001/02 2,878,000 (-3.2%) Ansett collapse

2002/03 3,083,000 7.1%

+ 32%2003/04 3,402,000 10.3%

2004/05 3,689,000 8.4%

2005/06 3,832,000 3.4%

2006/07 3,889,000 1.4% High dollar

2007/08 3,936,000 1.2%

Source : Cummings Economics from Cairns Ports data.

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Growing Global Markets. Growing Global Markets.

Transport Developments.Transport Developments.

Development of Development of TechnologyTechnology

Suited to the Area.Suited to the Area.

Success Breeds Success.Success Breeds Success.

UNDERLYING FACTORS TO REALISATION OF REGION’S POTENTIAL

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GROWING

GLOBAL MARKETS

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Bulk carriers. Bulk carriers.

Improved roads and Improved roads and freight efficient road freight efficient road vehicles.vehicles.

Wide bodied jets.Wide bodied jets.

TRANSPORT IMPROVEMENTS

2020

Impacts of skyrocketing Impacts of skyrocketing fuel costs. fuel costs.

Greenhouse gas measures.Greenhouse gas measures.

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New Generation of Aircraft in 2009

Boeing DreamlinersAirbus A380

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Health. Health.

Plant and animal breeds.Plant and animal breeds.

Agricultural mechanisation.Agricultural mechanisation.

Reef and rainforest viewing.Reef and rainforest viewing.

Everyday living.Everyday living.

TECHNOLOGY SUITED TO THE AREA

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Build up industry, population, Build up industry, population, infrastructure.infrastructure.

More sophisticated business services, More sophisticated business services,

education, health, sporting and cultural education, health, sporting and cultural facilities.facilities.

More civilised/comfortable place to live.More civilised/comfortable place to live.

Fall in real costs of living and doing Fall in real costs of living and doing

business.business.

SUCCESS BREEDS SUCCESS

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POWERFUL ADVANTAGES

DEVELOPING

AS A SERVICE CENTRE

NORTHERN AUSTRALIA AND

NEARBY ASIA PACIFIC

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TROPICAL AUSTRALIA - Business Numbers inFINANCE, INSURANCE, PROPERTY & BUSINESS Services, June 2007

501 417

3,804 3,7593,312 3,453

510

5,535

0

1,000

2,000

3,000

4,000

5,000

6,000

No.

Stat Division

Cummings Economics Source: ABS Data.

2626

TROPICAL AUSTRALIAMANUFACTURING BUSINESSES, June 2007

111 117

582

729660 636

135

996

0

200

400

600

800

1,000

1,200

No.

Stat Division

Cummings Economics Source: ABS Data.

2727

Source : Cummings Economics from ABS Census data.

Percent of Workforce in Education & Health ServicesMajor Queensland Regions, 2006 Census (UPR)

StatisticalDivision

Education & Training

Health Care & Social

AssistanceTotal

Total Workforce

Size

Toowoomba/Darling Downs 8.9% 10.7% 19.6% 96,765

Townsville/North 8.1% 10.7% 18.8% 94,377

Rockhampton/Fitzroy 8.3% 8.6% 16.9% 87,632

Cairns/Far North 7.0% 9.3% 16.3% 107,468

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Indigenous communities. Indigenous communities.

Defence and surveillance.Defence and surveillance.

Trade PNG and Papua Trade PNG and Papua Indonesia.Indonesia.

OTHEROTHER

2929

In service industry catch up.In service industry catch up.

In natural resource endowed In natural resource endowed base industries.base industries.

In expanding trade area In expanding trade area opportunities.opportunities.

In specialist skill cluster In specialist skill cluster activity.activity.

NEW OPPORTUNITIES

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